As rental costs rise in the outskirts of Seoul, options for tenants without homes are dwindling. In the past month, the average deposit for newly registered monthly rentals of apartments around 59 square meters in Nowon District reached 134.19 million won, with monthly rent hitting 1.08 million won. With home prices increasing, the financial burden of renting has also grown.
According to data from the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, an analysis of newly registered monthly rental contracts for apartments between 58 and 60 square meters in Nowon from August 18 to September 17 shows an average monthly rent of 1.07 million won and an average deposit of 134.19 million won.
Compared to the same period last year, when the average monthly rent was 885,000 won and the deposit was 100.97 million won, these figures represent increases of 21.7% and 32.9%, respectively. However, these comparisons involve different contracts, and variations based on complex and deposit conditions are included.
When annualized, the average monthly rent translates to 12.93 million won, which is 2.31 million won higher than the 10.62 million won from the same period last year. The difference in average deposits also amounts to 33.22 million won. Tenants who secure deposits through loans must also pay interest in addition to rent, further complicating their housing choices.
Rental prices are also rising in the northeastern part of Seoul. According to the Korea Real Estate Agency's weekly apartment price trends for the second week of September, as of September 14, the average jeonse price for apartments in Seoul increased by 0.17% from the previous week. The 11 districts south of the Han River saw a 0.09% increase, while the 14 districts north of the river experienced a 0.27% rise, tripling the increase.
Nowon District saw a 0.45% increase, while Jungnang District rose by 0.40%. Gangbuk District increased by 0.26%, and both Dobong and Seongbuk districts rose by 0.24%, all surpassing the Seoul average. In Nowon District, a new contract for a 59 square meter apartment was reported on September 5, with a deposit of 360 million won.
Kim In-man, head of the Kim In-man Real Estate Economic Research Institute, stated, “Now even the outskirts of Seoul are seeing significant price increases, leaving tenants with no choice but to bear higher housing costs or move further away.”
Ham Young-jin, head of the real estate research lab at Woori Bank, explained, “The recent rise in home prices has affected those who can only choose between jeonse, monthly rent, or half-rent, as well as those who must remain in Seoul due to educational or job-related pressures despite the high housing costs.”
While housing construction has increased, the immediate availability of new rental units remains limited. According to the Ministry of Land, Infrastructure and Transport, the number of apartment constructions in Seoul from January to July this year reached 14,995 units, a 36.1% increase compared to the same period last year. However, completions dropped from 34,339 units to 17,603 units, a decrease of 48.7%. It takes several years for newly constructed apartments to be ready for occupancy.
Experts emphasize the need for supply measures that connect construction with occupancy, as well as support to alleviate the current burden on tenants. They suggest expanding public rental and jeonse programs, increasing rental assistance, and promoting the supply of non-apartment housing, which has shorter construction times.
Park Won-gap, a senior real estate expert at KB Kookmin Bank, noted, “While the increase in construction is a positive indicator, it does not immediately stabilize the rental market,” adding that building officetels or urban living housing with density incentives in semi-residential or semi-industrial areas could be a solution.
Ham concluded, “Ultimately, the solution lies in ‘supply,’ and expanding non-apartment housing, public rental and jeonse supply, and rental assistance for lower-income households are ways to achieve short-term results.”
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.